Purchasing Power of Money in the United States
from 1774 to Present

Why Not the Latest Observations?

We use annual data for our computations, therefore, it is necessary to have an annual observation for both the initial year and the desired year. For the indices based on GDP, it is only after the year is over that GDP can be measured. For price indices, the annual observations are usually the average of monthly observations. It would not be valid to compare a monthly observation in the current year with an annual observation in an earlier year.

We have created many of the historical series in MeasuringWorth, but the most recent observations are obtained from government agencies. The annual CPI and RPI observations are usually published in the first month or two of the next year, however the numbers for GDP do not come out until later. We strive to get the new numbers up as quickly as possible.

Computing the Purchasing Power of a monetary transaction in the past compares the relative value of a past amount of dollars to a present amount.
A simple "calculator" uses only the prices of consumer purchases to do this whereas a complete purchasing power comparator, such as found in this website, uses various prices, wages, output, etc., depending on the context. For more information on this issue, consult
Seven Ways to Compute the Relative Value of a US
Dollar Amount, 1774 - Present
where you will find a more extensive discussion of how to compute relative worth with many examples.

The answers you get from this comparator will be the same as those from the Relative Value comparator. That is, you will get the "simple" purchasing power calculator result and other choices that may be better depending on the context.

To determine the value of an amount of money in a particular
("original") year compared to another ("desired") year, enter the
values in the appropriate places below. For example, you may want to
know: How much money would you need in the year 2000, to have the
same "purchasing power" as $500 in the year 1960? If you entered these
values in the correct places, you will find that the "the simple purchasing power" answer is
$2,910.00.

You can make this computation among all the years between 1774 and Present.

Citation

Samuel H. Williamson, "Purchasing Power of Money in the United States
from 1774 to Present," MeasuringWorth, .

URL: www.measuringworth.com/ppowerus/

Please let us know if and how this discussion has assisted you in using our comparators.